UK regional cities have reported record levels of construction activity as investors look for value outside London.
SEE ALSO: Deloitte Real Estate Crane Survey 2017
Deloitte Real Estate’s latest crane surveys for Birmingham, Manchester, Leeds and Belfast city centres all recorded significant upticks in development activity during 2016.
Birmingham saw 1.4m sq ft of new office space under construction, a 50% increase on the previous year and the highest level of activity since the survey was first published in 2002. The city also saw a tenfold increase in residential schemes starting construction, totalling 2,331 units.
However, this was beaten by Manchester which saw a record 2,680 units under construction. Deloitte Real Estate partner and head of the North West office Simon Bedford, put the growth in city centre residential down to increasing demand from graduates and inward migration.
“For the first time, Manchester can expect to import more graduates than it exports this year, continuing its positive trajectory of talent retention and helping to grow the city-living market,” Bedford said.
Leeds lagged behind in terms of residential construction, with only three new starts in the city centre, of which two were taking advantage of permitted development rights to convert office into residential. There were only three completions in 2016, adding 174 units to the city’s housing stock.
Bedford said: “Leeds perhaps just hasn’t caught the wave that Birmingham and Manchester have done this year. It is interesting looking at the pipeline for next year. Leeds has got a lot coming through and I think they will begin to pick up.”
The city performed better in offices, with 712,960 sq ft completed, the highest level since 2007. Hotel building activity was up by 72% on the previous year with 385 beds across four schemes and new retail floor space doubled thanks to Hammerson’s 596,500 sq ft Victoria Gate completion.
TAKE A LOOK INSIDE VICTORIA GATE
Construction activity in Belfast was at its highest level since 2008, with 30 developments completed or under construction. This includes four new educational facilities, seven new student accommodation projects, six office developments and eight new hotels.
It is the first time Deloitte has completed a crane survey in the city. Bedford said Belfast had gone from in 2014 having “literally no cranes on the skyline to 2016 having nearer 20 cranes on the skyline.” He added: “It really is a city on the move and we wanted to record that.”
• What is the crane survey?
A report that measures the volume of development taking place across Belfast, Birmingham, Leeds and Manchester and its impact. Property types include residential, office, leisure, hotels, and education.
• When is it carried out?
Deloitte’s research for the crane survey was undertaken between 1 November 2016 and 6 January 2017.
• To send feedback, e-mail Louisa.Clarence-Smith@estatesgazette.com or tweet @LouisaClarence or @estatesgazette
DELOITTE REAL ESTATE CRANE SURVEY 2017
• UK regions show record construction activity
• Tourism and education lead Belfast boom
• Birmingham sees record construction activity
• Leeds office boost as resi underperforms
• Manchester city living booms
RELATED ARTICLES
• London crane survey 2016: build starts drop by 42%
• London office construction down 42%
• The 10 biggest investment deals of 2016
• Regional office take-up slides post-Brexit
• Manchester achieves highest Q4 lettings since 2010
• Briefing: What’s the local plan?
